I installed a application on a server and it set all config paths to the database as (local). For security reasons I need to point the application to a database on a different physical server. I have the exact same Database on both servers. Can I simply use regedit (wind ser 2008)and point the config strings to a different IP vs. (local)?

Assuming remote connections are allowed on the target sql server - setting the correct connection details - with correct authentication should allow a connection. Find out the connection details - and apply to the relevant config file. If you have problems connecting - use the troubleshooting tips on this post to troubleshoot. http://www.sqlserver-dba.com/2012/05/cannot-connect-to-sql-server.html